NEWS
19 Major Companies That Have Exited or Scaled Back Operations in Nigeria And Why
Nigeria’s challenging business environment has triggered a major shake-up among local and multinational companies, with several prominent brands either leaving the country, selling significant assets, restructuring their operations or withdrawing major portions of their local funding over the past five years.
From foreign-exchange instability and naira devaluation to inflation, rising operating costs, insecurity and declining profitability, businesses across different sectors have faced mounting pressures that have forced some of the world’s biggest companies to rethink their Nigerian operations.
Here are some of the major companies reported to have exited, divested significant interests or substantially scaled back their operations in Nigeria, alongside the key factors associated with their decisions:
1. Shoprite — Economic Decline:
The South African retail giant, Shoprite, moved away from directly operating some of its Nigerian business interests, with its parent company exiting while the brand continues to operate through a franchised arrangement.
2. Uber — Economic Pressure:
Ride-hailing giant Uber has faced the broader economic pressures affecting businesses in Nigeria, including rising operational expenses and a difficult consumer environment.
3. Guinness — Forex Instability:
Guinness Nigeria has undergone significant ownership and business restructuring amid foreign-exchange challenges and economic pressures. Its parent company exited its Nigerian ownership position, while the Guinness brand continues to operate under new ownership.
4. Netflix — Inflation:
Netflix significantly scaled back its local investment commitments amid Nigeria’s challenging economic conditions, including inflation and rising production and operational costs. Its service, however, remains available to Nigerian subscribers.
5. Sanofi — Naira Devaluation:
French pharmaceutical giant Sanofi has restructured its Nigerian operations amid the effects of naira devaluation and changing economic conditions affecting multinational businesses.
6. Kimberly-Clark — Inflation and Operating Costs:
Kimberly-Clark, the company behind major consumer brands, withdrew from direct manufacturing operations in Nigeria, with inflation, rising production expenses and the broader cost of doing business contributing to the decision.
7. Equinor — Unprofitability:
Norwegian energy company Equinor divested its Nigerian upstream interests after years of operating in the country, with profitability and portfolio considerations playing a major role in the decision.
8. Pick n Pay — Difficult Economy:
South African retailer Pick n Pay also pulled back from Nigeria, citing the difficult operating environment and economic challenges confronting the retail sector.
9. Amazon Prime — Inflation:
Amazon Prime Video scaled back its Nigerian operations and local investment commitments amid rising costs and inflation, although the streaming platform remains accessible to Nigerian viewers.
10. Procter & Gamble — Forex Instability:
Global consumer-goods giant Procter & Gamble reduced its direct manufacturing footprint in Nigeria, with foreign-exchange instability and difficulties associated with local production contributing to the restructuring.
11. GlaxoSmithKline Consumer Nigeria — Forex Instability and Inflation:
GlaxoSmithKline Consumer Nigeria, commonly known as GSK, exited its direct commercial operations in Nigeria and transitioned to a third-party distribution model. Foreign-exchange pressures, inflation and the challenging business environment were among the factors behind the restructuring.
12. Bolt Food — Economic Pressure:
Bolt Food discontinued its food-delivery operations in Nigeria as the company reassessed the sustainability of the business amid intense competition and economic pressures.
13. Jumia Food Nigeria — Unprofitability:
Jumia Food shut down its food-delivery operations in Nigeria as part of a broader decision to concentrate resources on its core e-commerce business and improve profitability.
14. Food Court — Financial Difficulty:
Food Court was among the businesses affected by Nigeria’s increasingly difficult operating environment, with financial challenges contributing to the closure or scaling back of its operations.
15. Microsoft — Economic Adjustment:
Microsoft has made adjustments to aspects of its Nigerian operations and local investment footprint amid broader global and regional restructuring. Its products and services, however, remain widely used in Nigeria.
16. TotalEnergies Nigeria — Vandalism and Security:
TotalEnergies has divested significant assets in Nigeria while maintaining a presence in the country. Security challenges, vandalism, operational risks and changing investment priorities have influenced major decisions within Nigeria’s oil and gas sector.
17. Shell — Theft and Security:
Shell has divested major onshore assets in Nigeria after decades of operations, with crude-oil theft, pipeline vandalism, environmental concerns, operational difficulties and security challenges forming part of the difficult environment surrounding its onshore business. The company continues to maintain substantial interests in Nigeria.
18. ExxonMobil — Declining Production:
ExxonMobil has also pursued major asset divestments in Nigeria as production dynamics and investment priorities have changed. Despite divesting significant interests, the company continues to have operations in the country.
19. Etisalat — Economic Pressure:
Etisalat’s Nigerian business underwent a major ownership and restructuring crisis following severe financial pressures, eventually resulting in the rebranding of the telecommunications operation as 9mobile.
A Business Environment Under Pressure:
The departure or restructuring of these companies highlights the growing pressures facing businesses operating in Nigeria. Foreign-exchange volatility, naira depreciation, high inflation, insecurity, energy costs, taxation, rising wages, supply-chain challenges and declining consumer purchasing power have all contributed to a difficult operating environment.
However, it is important to distinguish between a complete exit from Nigeria and a divestment, restructuring or reduction in local investment.
Some companies on the list no longer operate their Nigerian businesses in the same form as before, while others have sold major assets or withdrawn direct funding but continue to serve Nigerian consumers. In several cases, brands remain active through franchisees, distributors, licensees or new owners.
Key to the List:
— Parent company exited or relinquished direct ownership, but the brand continues to operate through a franchise or another arrangement.
— The company withdrew or significantly reduced major local funding/investment, but its services remain available in Nigeria.
— The company divested major Nigerian assets but continues to maintain operations or interests in the country.
The developments underline a significant transformation in Nigeria’s corporate landscape, as multinational companies increasingly reassess how much capital they commit to the country and whether direct ownership remains commercially viable under prevailing economic conditions.